Cleveland Fed researcher provides a brief history of bank capital requirements in the United States

In this Economic Commentary, Cleveland Fed researcher Joseph Haubrich provides a historical perspective on current discussions of capital requirements by looking at how the understanding of bank capital and the regulations regarding its use have changed over time.

Modern capital requirements can appear to be overly complex. Haubrich finds they reflect centuries of practical experience, compromises between different regulators, and legal and financial systems that developed over time, and that it is quite likely that the long evolution of capital requirements will continue.

Read more: A Brief History of Bank Capital Requirements in the United States

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell, doug.campbell@clev.frb.org, 513.455.4479